“Know thy enemy . . . ”
In marketing there are three “Knows” that you need to be intimately
aware of in order to succeed.
- Know yourself – your market, your product, your solution and how they fit together
- Know your customers – listen well and they will tell you what you need to know
- Know your competition – competitive analysis is the beginning of market success
Every business needs valuable insight not only about
their competitors but about themselves. For any company, identifying their
strengths and weaknesses is a vital component to increasing their market share
and their bottom line.
A competitive market analysis – as a business exercise – is
the one of the best ways to examine the products and practices of competing
businesses in order to streamline practices or to become more competitive.
Companies that utilize this type of evaluation can gain a significant edge in
the market and permit them to position themselves in a way that appeals to more
consumers and increases customer loyalty.
By far, the most important benefit of a competitive
market analysis comes from being able to accurately size up the competition and
accurately measure your company, product or service against them. When a
company understands who they are competing against and how they measure up
against them, they will be better able to make the necessary adjustments in
order to increase their effectiveness at retaining the customers they do have
while expanding the number of new customers that they are bringing in.
Part of the process of a well done competitive analysis
is gaining insight into your own weaknesses as well. If you are able to do this
accurately, you will enable yourself to recognize and then make the changes
needed in order to compete more effectively with your competition.
It is also just as important for a company to understand
where their strengths lie as well. A company that understands what they are
doing right can emphasize these positive aspects and set themselves even
further apart in their competitors.
Once completed, a comprehensive competitive market
analysis will be able to provide a company with a greater understanding of what
it is that sets them apart from the other companies in their particular market.
Identifying a unique product or service “need” in the market can help a company
accentuate that particular factor, feature or functionality in order to get a
leg up on the other businesses that are competing with them for the very same
customers.
To be affective, a comprehensive competitive market
analysis will identify at least three competitive companies for a business to
compare them with. Taking a “head in the sand approach” that ignores the
companies that a business is competing against or trying to delude yourself by
saying that “we are so unique and so different and incomparable that no one
really competes with us”, is a surefire route to failure.
A Competitive Market Analysis is not an easy process. To
some it may even seem to be a bit of a frivolous waste of time and energy. But it
is an extremely necessary step towards the success of your business.
